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Online home of Jeremy Scheff

Bitcoin and crypto-anarchist sloths

When I first heard of BitCoin, a decentralized (i.e. not controlled by a government or corporation) digital currency, I immediately thought of Neal Stephenson. Why? Well, I have a total mancrush on Neal Stephenson, so he is never far from my thoughts. But a central theme of several of his novels (and a peripheral theme in others) is currency. For instance, in Cryptonomicon, the protagonists are developing a digital currency which is "anonymous, untraceable, and untaxable", but ultimately there is still some gold sitting in a vault somewhere centralized.

But Stephenson's short story "The Great Simoleon Caper" is even more prescient:

"Any kind of E-money consists of numbers moving around on wires," I say. "If you know how to keep your numbers secret, your currency is safe. If you don't, it's not. Keeping numbers secret is a problem of cryptography - a branch of mathematics. Well, Joe, the crypto-anarchists showed me their math. And it's good math. It's better than the math the government uses. Better than Simoleons' math too. No one can mess with CryptoCredits."

Interestingly, not too many people seem to have made this connection.

Bitcoin is an incredibly intriguing idea. Especially in the context of WikiLeaks, where Paypal, Visa, and Mastercard decided not to process donations to WikiLeaks. A couple weeks ago I bought some Bitcoins through a nifty Paypal site (which have since tripled in value), but that has predictably been shut down.

An anonymous, untraceable currency would (theoretically) lie beyond the control of any government or corporate entity, for better or worse. I can't imagine the government (and the Fed) would take kindly to that concept. If I had any faith that the various benevolent governments of the world wouldn't crush Bitcoin into a mushy pulp if it ever got popular, I would be even more interested in all this digital, decentralized currency stuff.